Another Will Barnard Success Story

[Will Barnard]

Hello BP Nation. You may or may not  have noticed my activity level here on BP has been brief over the past 4 months or so as I have been extremely busy in the field with many development projects. A most recent one just completed, listed for sale, and in escrow set to close soon would be a great opportunity for me to share with you all what I have been doing over the last year.

As I have stated many times in the past, savvy investors must change how (and possibly where) they do business as the market conditions change. Adjusting to these market changes allows you to utilize the best money making strategy at that time while mitigating as much risk as possible.

With that said, my strategy has been to buy small, older, and dated homes in areas that have sold comps selling for at least $500 per SF. After closing on them, the idea is to demolish most of the existing and build the property out to maximize the returns. By adding square footage to the property, I am literally "creating my spread" as my cost to build is well under what I can buy/build.

So without further ado, here is the latest one:

Purchased for $700,000 / $250,000 Construction Costs / List Price $1,269,000 / Sold Price $1,335,000. So if you add the purchase price to the construction costs, you get $950k and then divide by the sold price and you get a deal at 71%. Now you all know the 70% rule and I must say that it is almost impossible to get to that number in my market here in So Cal but in this case, I was able to get to that number, not at purchase but after coming up with the best build out plan and getting the highest sold price. So this one turned out to be a home run. Most of the deals I am doing in this format are the typical 77% to 80% deals, however, in each of them, the total profit is always over $100k making for a nice profit no matter how you slice the percentages.

On top of that, this deal was funded by my private investors via debt financing and they made a 10% return on the $850k invested.

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After Photos: